For companies to grow, they have to sell you more

A trip to the store to pick something up can quickly turn into a shopping spree in today's consumer economy. How often do you get upsold?

Kenneth Brown/Marketplace

In order for businesses to keep growing they resort to a number of tactics. One of those tactics is the practice of upselling: where workers on the floor try to get you to buy a little something extra while you're in their store.

“Do you want fries with that?”

“Would you like to add shrimp to that salad?”

“Let me tell you about our extended warranty.”

“Oh, and how about a new tie to go with the shirt?”

Suggestive selling, upselling, cross-selling. Call it what you want, but they’re all about one thing. Bueinsses making more money.

Yeah, it’s annoying. Sometimes you feel like slugging the kid at the movie concession stand when he tries to sell you that over-sized pretzel you didn’t ask for. But marketing folks say upselling is simply the price we pay for our consumer-sales-driven economy.

“Clearly, business is becoming more competitive,” says Sunil Gupta, head of marketing at the Harvard Business School. “As a result, the cost of acquiring new customers is going up very, very high. So a company says, 'Okay, I have you as a customer and it’s easier to sell more things to you than to go look for a new customer.'”

Easier and cheaper. In some industries, seven times cheaper. Besides, when you’re selling a more expensive product, it usually has a higher profit margin. And selling a lot of different products to the same customer buys their loyalty, so the research says. Has your car insurer been trying to sell you life and home insurance, too? Natch.

Companies are also getting smarter about extracting more from every consumer. They have more personal and sales data on us than ever before, thanks to technology. But the bottom line is that there’s crazy pressure on companies from Wall Street and shareholders for more profits.

“Wall Street is always looking for growth,” says Wharton marketing professor Barbara Kahn. “In order to grow, you have to get people to buy more.”

Kahn sees upselling as a good thing, especially when companies use the data they collect on you to customize their upselling.

“Companies are investing in you to learn what you want," she says. "So, the things they either try to upsell or cross sell to you should be things that you want.”

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A trip to the store to pick something up can quickly turn into a shopping spree in today's consumer economy. How often do you get upsold?

Kenneth Brown/Marketplace

In order for businesses to keep growing they resort to a number of tactics. One of those tactics is the practice of upselling: where workers on the floor try to get you to buy a little something extra while you're in their store.